As the year comes to a close, tax deadlines are also looming. While this typically means a varying amount of tax liability depending on the individual, there are also ways taxpayers can benefit from the tax laws through components like deductions. The Section 179 Deduction is a particularly comprehensive and popular deduction to opt in on.
Section 179 allows taxpayers to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated.
The term property refers to a broad range of items including physical hardware and equipment. Certain types of software are also considered property, which is particularly beneficial to business owners.
Software qualifies for Section 179 deductions if the software meets all of the following criteria:
- The software must be financed or purchased outright by you.
- The software must be used in your business for income-producing activity.
- The software must have a determinable useful life.
- The software must be expected to last more than one year.
- The software must be readily available for purchase by the general public.
- The software must be subject to a nonexclusive license.
- The software must not have been substantially modified.
The deadline to qualify for this deduction is December 31, 2016.
For more information on Section 179 and software deductions visit: http://www.section179.org/section_179_and_software.html